Cell site sharing to cut costs for mobile firms

New Delhi, Oct 29 | Updated: Oct 30 2006, 05:30am hrs
Reliance Communications, Bharti Airtel, Aircel and Spice Telecom are in advanced stages of talks to share each others existing cell site across the country. The move comes soon after a similar agreement was signed between Reliance, Hutch-Essar and Idea Cellular. Currently, all operators in India have a total of 35,000 cell sites in India. The number is projected to go up to 1 lakh by 2010.

Early this year, mobile operators had reached an agreement to share future cell site infrastructure to reduce costs and also overcome space crunch. Four new pilot cell site projects on a shared basis in Delhi were inaugurated by communications and IT minister Dayanidhi Maran a few months back.

Industry sources told FE that as all the operators were looking at pan-India rollout, sharing existing cell sites would enable a faster roll-out and bring about considerable savings in their capital and operating expenditure in a market marked by declining tariff.

The major gainers will be Reliance which has aggressive plans to roll out GSM services in 21 circles for which it has applied for GSM spectrum. Aircel also will gain as it has also applied for licences for almost all the circles and recently was given letter of intent for seven circles.

Idea is also looking for expansion. It has got the licence for Mumbai circle and would soon roll out services there. Bharti Airtel has plans to reach out to all 5,200 census towns in the country and such a sharing deal would help it in faster roll-out.

Cost Cut

The move comes soon after a similar agreement was signed between Reliance, Hutch-Essar and Idea Cellular
The major gainers will be Reliance which has
aggressive plans to roll out GSM services in 21 circles
Mobile operators had reached an accord to reduce costs

The benefits of sharing existing cell site infrastructure are easily visible. For instance, the recent Reliance-Hutch deal enables the former to share 16,000 sites of Hutch across 13 circles. With Idea, Reliance will be able to share its 7,000 sites across 11 circles. Similarly, Hutch and Idea will have access to Reliances sites in 21 circles.

Apart from saving on capex and opex and faster roll-out, the move would also add a revenue stream for companies as they would charge rental for sharing the cell sites.